Donnerstag, 14. März 2013

Your New Bankers wear Skinny Jeans

The Future of Crowdfunding: Your New Bankers Wear
Skinny Jeans

Crowdfunding. It may not be obvious yet, but the world of finance is about to get the Internet treatment. Unpredictable. Inexorable. And transformative. What started as friends funding a band’s tour is going to eventually alter the flow of money around the globe.

Crowdfunding, geek-fuzzy for “the democratization of capital markets,” has moved from the fringes into the heart of apparel, cleantech R&D, art, culture, history… and shows no signs of stopping, especially as for-profit crowdfunding becomes legal next year.

For nonprofits, the techniques are starting to be adopted by large organizations, like the Red Cross running 25 Indiegogo campaigns to supplement its other fundraising, and building platforms to translate already-extant programs.

Employee-giving campaigns at companies – perhaps one of the older forms of crowdfunding – is benefiting from online platforms. As much as social media has changed the way we communicate, crowdfunding, microfinance, and tools like it will change the way money moves around the world.

“The 1980s were the decade of the personal computer, the 1990s the decade of the laptop, the 2000s the decade of social media, and the next 10 years will be the decade of access to capital,” said Slava Rubin, the founder Indiegogo, the world’s largest crowdfunding platform.

Slava Rubin, INDIEGOGO

The good news? So far, experts say, the things that crowdfunding have created are, by definition, things that real people actually want. “Crowdfunding is an entire shift of what gets made,” said Emily Best, founder of film-specific platform Seed&Spark, on a panel at SXSW Interactive. “Someone has to actually click on this link and support it. So the quality of these films is really high.” Seed&Spark, started by Best as an experiment for her own project, represents one of the first industry-specific iterations of crowdfunding: filmmakers and fans swap, loan, and fund each other the various lights, mikes, etc. that contribute to the cost of the film. (She describes it like a “wedding registry for a movie.”) As one of the first industries to really explode online, film and documentary offers interesting insight as to what is in store for other industries.

Emily Best, Seed & Spark

But on top of this traditional supporting methods are layered a new set of values that derive from Internet culture: transparency in the production process, fair trade standards, copyright protection for artists. Signs that Internet-enabled funding is linked to something more than convenience, but to an emerging set of organizational shapes, expectations, insights.

Two other new platforms allow for audiences to run their own movie theatres, joining in social screenings or arranging for inperson theatre shows: Tugg for film, and OVEE for public media. If Internet media has cut into the traditional PBS audience over the years, ironically, OVEE has the potential to give it back. “Public media wants to expand its funding base, and deepen its relevance,” said Patrice O’Neill, CEO of Not In Our Town, an anti-hate-crime organization that has signed on with OVEE. “Stations have to find new ways to connect with their local communities.

ITVS’s platform has tremendous potential for community building.” Not In Our Town is a forerunner of media/community building, organizing communities for 17 years around screenings of their documentaries. They have built a national network of 68 chapters and a national gathering based on their documentaries that show positive responses to hate crime.

The Internet has a way of doing this to one industry after another: software, the traditional media, the hotel industry, just to name a few. How will crowdfunding change capital markets? Indiegogo’s Rubin, like many other leaders in the space currently waiting on the federal rules being written on for-profit crowdfunding mandated by last year’s JOBS Act, is fairly tight-lipped about the future for their sites. But there are other changes.

Kiva, the global microfinance giant, started a pilot program last year called Kiva Zip (in the U.S. and in Kenya). Rather than relying on local microfinance institutions, Kiva Zip aims to reach out to places MFIs don’t already serve – including remote villages on an island on Lake Victoria… and the United States.

Kenya

Rather than screening through MFIs, this will open up to Kiva to dozens more countries, as well as to the U.S. These new loans will be zero percent so that they aren’t subject to regulation. In fact, Program Director Jonny Price (presenting Monday at SXSW) has a vision of what this would mean: replacing predatory lenders. twelve million of the poorest Americans get “paypal” loans at exorbitant rates, and services like Kiva Zip could be a possible replacement.

Just like with nonprofit organizations and the film industry, there is no reason that finance industry won’t be effected. We’d like to thank MyCharityLife for finding us in this early stage of the Philanthrogeek experience and believing in what we have to offer. We can’t wait to see how this partnership unfolds in Austin and in the months to come. And we’re so excited to meet our fellow philanthrogeeks and change makers at SXSW!